CLOSING AND POST-AUCTION
Pending An Auction
Once your auction has concluded and your Purchase and Sale Agreement has been signed, one of the first things you should do is clean up any ongoing marketing efforts and marking your auction as pending on your website. If there are any ongoing elements of your marketing campaign (pending social posts, listings on 3rd party websites, MLS, etc.) you will want to stop them so you’re not charged for these items. You will also want to go onto Bullseye and mark the auction as a pending sale. Full instructions for this are available in the Closing an Auction in Bullseye page. If you’re going to order any seller thank you gifts, now is the time to place your order so you have them in hand for closing. You should also use the time between the auction and closing dates to start laying out your Post Auction Marketing Analysis to give to your seller at closing.
Post Auction Marketing Analysis
In the How to Find Auction Opportunities section, we discussed why tracking your marketing efforts is important and in the Auction Marketing section, we outlined the importance of sending weekly marketing reports to your seller to remain transparent. Now that the auction has completed, you should compile this data into a final marketing analysis report that includes screen shots of digital media, electronic tear sheets of print advertisements and summaries and analytics of all media vehicles involved in the auction marketing campaign.
An example of this report is available in the Document Center and should include the following:
Title Page
Auction Summary
Name of Seller - Property Description - Auction Date and Location - Total High Bid(s) - Total Purchase Price
Copy of Listing Agreement
Copy of Marketing Campaign
Marketing Proof of Performance
Screen shot or digital copy of each marketing piece ran & statistics from: PIPs, Online Bidder activities & stats, Number of showings, Number of bidders
Copy of Purchase Contract
Traditional Closing vs. Auction Closing
The auction closing process is much like the traditional real estate closing process but without all of the difficult parts! Once an auction has concluded and the winning bidder (now the buyer) has signed the Purchase and Sale Agreement, a closing date is set (typically within 30 days after the auction) and the closing process begins. One of the major benefits of the auction process is that all of the due diligence was done prior to the auction taking place, leaving no contingencies for the buyer default on closing the deal (without facing the loss of their earnest money/down payment). Closing a real estate auction may be the easiest closing of your life!
Traditional Closing
Enter escrow: You’ve already done this! Per your Auction Listing Agreement, you ordered the title insurance commitment at your seller’s expense. | Get pre-approved for a mortgage: The buyer has already done this! Per your Auction Purchase and Sale Agreement, your auction sale was not contingent upon financing or due diligence. | Schedule a home and pest inspection: The buyer has already done this! Per your Auction Purchase and Sale Agreement, your auction sale was not contingent upon financing or due diligence. | Renegotiate the offer: The auction was the negotiation! There is no more negotiation after the auction | Deposit funds into escrow: You’ve already collected these! Per your Auction Purchase and Sale Agreement, the earnest money deposit/down payment deposit was collected immediately after the auction and given to the Closing Agent to disperse at closing. | Perform a final walkthrough: There is no final walkthrough with auctions! | Sign all paperwork: Both the buyer and seller will meet with the title company to make final payments, sign legal documents, and officially transfer ownership.
Auction Closing
Key Closing Data You Need: Contractual closing date, Earnest money/down payment deposit amount, Subsequent deposit amount, Verify deposit funds cleared, Seller name and contact information, Seller attorney name , Referral agent, Buyer name and contact information, Buyer attorney, Buyer broker, Escrow agent | Send Executed Contract to: Auction Company, Seller, Buyer, Buyer Closing Attorney or Title Co., Seller Attorney | Communicate All Parties ID and Contact Information to: Seller, Buyer, Buyer Closing Attorney or Title Co, Seller Attorney, Buyer Broker | Communicate Closing Deadline and Details to: Seller, Buyer, Buyer & Seller Attorneys, Title Co. | Commission statement/instructions sent to: Seller, Buyer & Seller Attorneys, Title Co. | Commission and Deposit: Prepare commission instructions for closing agent, Seller/Seller attorney review of commission instructions, Send commission instructions to closing agent | Release Escrow Funds: Obtain final settlement statement, Obtain fully executed settlement statement, Obtain confirmation of property recordation
Post-Auction Activities
The Post-Closing process begins with collecting documents from closing and ends with the distribution of acknowledgements, buyer/seller Thank You’s, and updating buyer/sellers in your contact databases.
Documents for Your File
Original Proposal, Original Auction Listing Agreement Signed by Sellers, Approved Marketing Budget, Original Disclosures Signed by Seller and Buyer (Broker/Agency, Lead Paint, Property, etc.), Copy of Title Commitment, Copy of Down Payment/Earnest Money Check, Original Contracts/Purchase Agreements and Addendums Signed by Seller and Buyer, Copy of Any/All Property Documents (Inspections, Appraisals, Maps, Leases, etc.), Post Auction Marketing Analysis, Copy Inquiry Logs & Open House Sheets, Auction Audio/Video Recordings, Commission Instruction Sheet, Copy of Closing Check, Copy of Contracts & Checks to Auction Staff, Facilities, Catering, Security, etc.
Buyer/Seller Thank You
While not a requirement, it is always a nice gesture to send your buyer and seller a thank you. Whether your thank you is a simple handwritten note or something more robust, closing thank you's and gifts are a great way to commemorate the sale while staying top of mind and sliding in a chance to ask for a referral. | Gift Ideas: Personalized gifts like welcome mats, blankets, glassware, etc., Professional photos of a new property or historical local maps, Usable branded promo items like travel cups, ear buds, car chargers, Bluetooth speakers, etc., Potted plants, Gift cards to local restaurants or experiences, Gift baskets with food, wine, etc.
Update Your Database
Remember when we were in the prospecting for auctions phase? In the How to Find Auction Opportunities section of this manual, we discussed your sellers being valuable assets for future referrals. 64% of new sellers listed with someone they were referred through by friends and family. The only way you can access these referrals is by maintaining a relationship with your buyers and sellers so you remain top of mind when a friend or family member needs your services. Be sure to update your buyer/seller’s new contact information and addresses and add them to your newsletter list, send holiday cards and simply check in on them once and awhile. You’ll be surprised by how many referrals you can get by simply asking if they know anyone needing help.